HP’s off-and-on romance with its PC business is on again

If you didn’t know any better, you might not believe that Hewlett-Packard(s hpq) came this close to unloading its PC business a year and a half ago. On the company’s first quarter earnings call, CEO Meg Whitman gave a pretty strong impression that she is downright devoted to the Personal Systems Group (PSG), despite the fact that revenue fell 8 percent from the year-ago period.

Revenue for commercial or business PCs fell 4 percent, and for consumer machines it was off 13 percent, but Whitman saw the bright side.

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“Against the backdrop of overall PC market contraction in the fourth calendar quarter, we gained 1.4 points of market share in PCs over the prior year, including a 4.6 point gain in the U.S.,” Whitman said Thursday night. She also cited the company’s new EliteBook Revolve convertible, ElitePad 900 as well as its new Google(s goog) Chrome-based notebook as reason for optimism going forward.

After Whitman’s opening remarks, Raymond James analyst Brian Alexander pressed her on PSG, noting that its profits were off 50 percent year over year.

“We are committed to this business,” Whitman said in response. “We are going to compete on differentiation, whether that is form factors, increased focus on mobility, a multi-OS strategy, multi-chip strategy, frankly relevant to various industries, we’ve got great response to our ElitePad 900 that can be customized by industry and then services.”

She also acknowledged that pricing will be “problematic and quite competitive … but we think we can manage that.”

HP has wavered on whether it would keep or jettison various businesses over the past year. Its proxy statement in December noted that the company would consider selling off or divesting some businesses as needed. So, given that the company had broached — then retracted a possible PC business spin-off once before — that got tongues wagging again.

This news comes just weeks after PC and server rival Dell(s dell) announced plans to go private — news which prompted HP to put out its own comments inviting Dell’s customers to avoid the uncertainty of a leveraged buyout and jump ship to Hewlett-Packard.

Given Whitman’s statement of support for this margin-stressed business unit, HP is either in it for the foreseeable future, or talking it up to enhance its value to a potential suitor. Hey, you’ve got to wonder, right?

HP took $20B in write downs in the last 12 months. We need to see earnings over the next two years, without further write-downs to understand their earning power. It is easy to write-down assets, and write-off projects in the $20B trip to the city dump, and then forward earning look good – for a while.

That said, they only have to compete with IBM, Cisco, and Oracle – all high overhead companies. Piece o cake, eh?